Malaysian Mobile Telcos: The Real Situation

A question that's been plaguing me is why aren't Malaysian telco providers providing better service than this? Think about it. How many conversations have you actually had lately that didn't involve the following phrases:

• "Hello? Hello? Helloooooooooo... Hello?"
• "Sorry, what? I can't hear you. Wait ah, let me find better service"
• "You go straight, and then -Do-re-mi tone- hello? hello?"

I've always stood up for Malaysia when people said Malaysians are driving the country into the ground, and I was always adamant that Malaysia isn't as bad as people make it out to be. I'm on the verge of changing my mind.

During my 4 years in Australia, I barely had any problems with my mobile telco service provider. I barely even had to call them. Can't even think of any times I couldn't get through to someone, or had a dropped call.

When I bring that up, most say, "You can't compare us to Australia". I ask, "Why not? Many companies say their lack of infrastructure is due to low transaction volumes in Malaysia, but that doesn't apply to Australia. They have less people!"

Facts:

1. Malaysia has a larger population than Australia.
2. Australia is physically more than 25x the size of Malaysia.

Still, Australia is able to put up the infrastructure to cater to its widely-spread population, but Malaysians have trouble reaching the interiors of Sabah. Granted, their GDP is higher and that would affect how much they would have to invest in infra, but Malaysia has lower labour costs and is much closer to suppliers in China, reducing significant transportation and logistics costs, on top of being much, much smaller. In other words, logically, it should be cheaper to set up a network of cell towers in Malaysia.

With some research, I've found that I'm not the only person complaining about it.

Source: Industry Performance Report 2009, Suruhanjaya Komunikasi dan Multimedia Malaysia (MCMC)

NB: CAGR means Compounded Average Growth Rate, i.e. the effective growth rate each year for the time period in question

• In 2009, 6,178 people filed complaints for fixed line and mobile phone services, up from 178 in 2002. This is an increase of over 64% annually.
• Of the 6,178, 2,846 (46%) were complaints pertaining to poor service.
• In 2009, there were 30.4 million mobile subscribers, up from 9.1 million in 2002. This is an increase of just 19% annually.
  

I'm pretty sure that if the number of subscribers is only growing at 19% YoY and the number of complaints are going up 64% YoY, something is wrong somewhere. I'm pretty sure the number is also not reflective of the true situation as most wouldn't bother to report a dropped call.

So what's going on? Haven't the telcos been investing in maintaining and adding on to their infrastructure to cater to increasing demand? Apparently they have.

Sources: Annual reports

*CAGR for Axiata is for 2005 to 2010 only

The table above shows the Net Book Value for Telecommunications Network Equipment for Malaysia's 3 largest mobile telco service providers. According to this, they have been continuously investing in infrastructure since 2002. In RM values, their investments have outstripped the growth of mobile subscribers to 2009.

Again, the question remains: What is going on? Telcos have apparently been investing in infrastructure, but the sheer volume of complaints coming in pertaining to poor service and public debates on the issue of poor network service indicate that it isn't enough.

So, what is the role of MCMC in the whole issue? Their mission includes:

• Ensuring consumers enjoy choice and a satisfactory level of services at affordable prices;
• Providing transparent regulatory processes to facilitate fair competition and efficiency in the industry;
• Ensuring best use of spectrum and number resources

I'm not sure they are doing so, given the state of our telco mobile networks, but that is just my opinion.

I'll stop short of accusing people of things because, let's face it, I'm Malaysian and subject to tyrannical laws on freedom of speech, but take the time to educate yourselves. Don't accept sub-standard services.

• You can find the General Consumer Code of Practice outlining our telco's responsibilities to its users here.
• They've also released the Mandatory Standards for Quality of Services (MSQoS), which came into effect in 2003. The standards can be found here.

You'll note that the MSQoS rates each telco based on reports and complaints filed. Not to whinge, but there is a benefit to complaining.